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Letterman’s retirement is chance to draw younger viewers

END OF AN ERA: Letterman announced that he will retire in 2015 when his contract expires. He announced no specific end date, telling his audience he expects his exit will be in "at least a year or so, but sometime in the not too distant future, 2015, for the love of God, (band leader) Paul (Shaffer) and I will be wrapping things up." Photo: Associated Press

Since the 39-year old Fallon succeeded Jay Leno as star of “The Tonight Show,” NBC’s ratings for the 11:35 p.m. hour have jumped both in overall audience numbers and among the key demographic of viewers aged 18 to 49 that advertisers most desire.

The surge comes as a larger number of young viewers are tuning in to Fallon, a veteran of “Saturday Night Live,” as he masquerades in elaborate skits as rock stars and politicians, or plays Egg Russian Roulette with celebrity guests willing to risk having raw eggs smashed over their heads on national television.

In the most recent Nielsen ratings, “The Tonight Show Starring Jimmy Fallon” averaged 5.2 million viewers, up 41 percent from Leno’s numbers before his February departure from NBC.

Ratings for both Letterman and “Jimmy Kimmel Live!” on the Walt Disney Co.-owned ABC network trail with slightly less than 3 million viewers apiece.

Letterman’s announcement on Thursday during the taping of “Late Show with David Letterman” in New York that he plans to retire sometime in 2015, when his contract expires, represents the latest upheaval in a changing of the U.S. television’s late-night guard.

The three shows together generated more than $400 million in advertising sales in 2012, according to the latest numbers available from ad tracking firm Kantar Media.

And the three shows all remain large, though shrinking, profit centers because the networks cram in more commercials per hour late at night than they do in prime time, said Brad Adgate, research director at media and advertising firm Horizon Media. Production costs are held down, with guests being paid at union scale rates, he said.

CBS has not said who might succeed Letterman, but the network needs to find someone who can siphon away some of Fallon’s younger viewers, media executives said.

Fallon has also developed a huge social network following, an increasingly important marketing avenue for networks to promote their shows.

YouTube registered more than 4 million views of Fallon’s parody of Bruce Springsteen’s hit song “Born to Run,” in which he and Springsteen lampooned New Jersey Governor Chris Christie’s bridge-closing scandal.

Craig Ferguson, star of CBS’s “The Late Late Show with Craig Ferguson” at 12:35 a.m., was reportedly promised Letterman’s slot in 2012 when CBS renewed the contracts for the two men. Both shows are produced by Letterman’s Worldwide Pants company.

But ratings for the 51-year old Ferguson’s show are well behind those of “Late Night with Seth Meyers,” which occupies the 12:35 slot on Comcast’s NBC network.

Jon Stewart, host of Comedy Central’s “The Daily Show,” is considered a possibility to succeed Letterman on CBS. So is the Viacom owned cable channel’s Stephen Colbert, host of “The Colbert Report.” Both have sizeable followings among younger viewers.

Whoever gets the “Late Show” host chair has a larger role to play at CBS beyond opening monologues and chatting with guests. The late-night host creates a “brand” for the entire network, said Jeff Gaspin, former chairman of NBC Universal Television Entertainment.

“The host of late night represents the network on a daily basis and in most cases for decades,” said Gaspin. “Along with news and sports talent, they are the only entertainment personalities to do so.”